ACAMS CAMS - Certified Anti-Money Laundering Specialist (CAMS7 the 7th edition)

The CAMS 6th Edition clearly identifies a risk-based approach as the cornerstone of effective AML/CFT programs. Risk assessments should consider various risk factors that directly influence exposure to ML/TF.

Product risk (A): Certain products or services may present higher ML/TF risks, such as private banking, correspondent banking, or cash-intensive products.“Products and services offered, and their inherent risk levels, must be assessed as part of the risk-based approach.”(CAMS 6th Edition, AML Compliance Program, Risk Assessment)

Geographic risk (C): Jurisdictions where the customer operates or where transactions are conducted may present higher or lower risks due to factors such as weak AML regulations or high corruption.“Geographic risk considers where a customer is located and/or where transactions occur, referencing countries with increased risk, such as those identified by the FATF.”(CAMS 6th Edition, Risk Assessment Factors)

Customer risk (D): The type of customer, such as PEPs, non-residents, or companies with complex structures, may present higher ML/TF risks.“Customer risk assessment is based on the customer’s profile, activity, and ownership structure, and is a critical component in risk-based monitoring.”(CAMS 6th Edition, CDD/EDD)

Incorrect Options:

B (Credit risk): Related to creditworthiness, not ML/TF.

E (Liquidity risk): Refers to a firm’s ability to meet financial obligations; not an AML risk factor.

One of the central pillars of the EU AML Package adopted in June 2024 is theEU AML Regulation. This regulation introduces directly applicable AML/CFT rules across all EU member states, replacing the previous approach where AML directives were transposed into national laws. This shift addresses regulatory fragmentation and strengthens enforcement across borders.

The complete AML Package includes the following four pillars:

EU AML Regulation (directly applicable rulebook)

6th AML Directive (not the 7th)

Establishment of a new EU Anti-Money Laundering Authority (AMLA)

Revised Transfer of Funds Regulation, especially concerning crypto-asset service providers

The EU AML Regulation aims to unify and streamline the application of AML/CFT measures across the EU, ensuring a consistent and effective framework.

Unusual wire transfer transactions may include transfers in different currencies between accounts at different banks for the same client, which can be used to obscure fund flows, and incoming third-party transfers followed by real estate purchases, which may indicate layering and integration stages of money laundering. These patterns deviate from typical financial behavior and warrant closer scrutiny.

C: Privacy coins (like Monero, Zcash) are designed to obscure transaction details, making tracing difficult.

D: Crypto-mixers (or tumblers) mix potentially identifiable cryptocurrency funds with others, obscuring the source.

“Privacy coins and mixing services are specifically cited as high ML/TF risk tools, enabling greater anonymity.”(CAMS 6th Edition, Cryptoassets ML/TF Risks; FATF, Virtual Assets Guidance)

Verifying a customer’s identity is a fundamental CDD requirement under the FATF Recommendations, ensuring you know who your customer is.

Identifying the beneficial owner is required to uncover the natural persons ultimately controlling or benefiting from an account, closing the gap that would allow misuse of corporate vehicles.

The CAMS 6th Edition specifically lists environmental crime as a predicate offense for money laundering. Environmental crimes include activities such as illegal logging, illegal mining, and illegal trade in wildlife.

“Environmental crime, including illegal logging and mining, is recognized as a predicate offense to money laundering. Such crimes often involve complex corporate structures to hide the illicit origin of the proceeds.”

(CAMS 6th Edition, Chapter: Risks and Methods of Money Laundering and Terrorist Financing; FATF Recommendations, Predicate Offenses)

Incorrect Options:

A: Trade-based ML refers to manipulating trade transactions, not the underlying crime.

B: Corruption may be involved, but the primary crime is environmental.

C: Illicit resource trade describes the act, but the official predicate crime category is environmental crime.

Accounting can help detect irregular financial patterns, technology solutions and IT security provide systems for monitoring and data protection, and fraud risk management identifies and mitigates suspicious activities - all of which are essential to supporting AML and sanctions compliance programs.

Transaction monitoring governanceinvolves ensuring thatAML detection systems are effective, aligned with regulatory standards, and capable of identifying evolving threats.

Option B (Correct):Legal cooperation is essential for responding to subpoenas and law enforcement inquiries.

Option D (Correct):Regularly updating transaction monitoring scenarios ensures that the system adapts to emerging financial crime trends.

Why Other Options Are Incorrect:

Option A (Incorrect):SARs cannot be withdrawn unless an error was made—once filed, SARs remain confidential and must be retained.

Option C (Incorrect):Client profile updates are a CDD/KYC function, not directly related to transaction monitoring governance.

Best Practices for Transaction Monitoring Governance:

Regularly review system effectiveness through validation tests.

Collaborate with legal and compliance teams for risk mitigation.

Use AI and data analytics to refine detection accuracy.

The UN Security Council has the authority to impose sanctions specifically to maintain or restore international peace and security.